Dollar/CAD slipped from the highs in a much-needed correction. The upcoming week’s highlights are the inflation and retail sales reports. What’s next? Here are the highlights and an updated technical analysis for USD/CAD.
Canadian housing figures were mixed: housing starts beat expectations with 217K while building permits plunged by 5.5%. In the US, the Fed’s worries about inflation hurt the greenback. Oil prices advanced and helped the loonie recover.
Updates:
USD/CAD daily graph with support and resistance lines on it.
Foreign Securities Purchases: Monday, 12:30. This is a measure of inflows into Canada. Back in July, it beat expectations with 23.95 billion, showing confidence. A lower number is likely now.
BOC Business Outlook Survey: Monday, 14:30. The quarterly report provides an insight on the economy, especially as it is released early in the quarter and comes from the BOC. After a very strong Q2, it will be interesting to see if the report points to a cooldown in the economy.
Manufacturing Sales: Wednesday, 12:30. In the past two months, the volume of sales disappointed with bigger-than-expected falls. After a slide of 2.6% in July, we can expect a bounce now. The figure tends to move the loonie.
Inflation report: Friday, 12:30. The Bank of Canada sees inflation as rising in the near future these expectations supported the rate hikes. But is inflation really rising? Headline CPI rose by 0.1% in August. Core CPI remained flat and disappointed last month. The BOC also releases additional core measures: Common CPI stood at 1.5% y/y, the Median at 1.7% and the Trimmed at 1.4%. If they all move in one direction, the loonie will feel it as well.
Retail sales: Friday, 12:30. If inflation does not provide big surprises, retail sales can take the lead in moving the C$. The volume of sales rose by 0.4% in July. Core sales lagged behind and rose by 0.2%.
* All times are GMT
